Business and management

The battle for Dell

Dellayed again

DELL must now wait a few more weeks to learn its fate. A vote scheduled for August 2nd on a buy-out plan for the computer-maker that has been put forward by its founder, Michael Dell, and Silver Lake, a private-equity firm, was delayed yet again after the two partners sweetened their offer for a second time. The deal, which is now worth almost $24.8 billion, will (hopefully) be put to a vote on September 12th.

The buy-out team has faced stiff opposition to its bid from Carl Icahn, a veteran shareholder activist, and Southeastern Asset Management, a big fund manager. Their pressure has forced Mr Dell and his allies to lift their offer from $13.65 a share to $13.75 and to commit to a $0.13 special dividend for shareholders. Dell also announced that its third-quarter dividend would be paid even if the buy-out succeeds.

All this has added another $350m to the original deal price. Dell’s share price stood at $13.66 in mid-afternoon trading on August 2nd, reflecting optimism that a deal can be sealed. A change in the voting rules has contributed to this optimism. Previously any votes not cast were counted as votes against the buy-out; now only votes cast will be counted. Mr Dell and Silver Lake need to win a majority of these to carry the day.

In spite of the optimism, there is still a chance that the bid could be derailed again. Mr Icahn filed a lawsuit on August 1st seeking to bar any change in the voting rules. A hearing is expected to take place on August 12th. If the court finds in Mr Icahn’s favour, shareholders in Dell will have their patience tested yet again.